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Tax commissioners brace for looming title tax

Officials at the Chatham County Tax Commissioner’s office are anxiously awaiting the implementation of a new title tax for automobile sales on March 1.

The tax replaces the vehicle sales tax and annual “birthday” property tax by applying a one-time fee based on the market value of the automobile.

That means most people will pay more up front when they buy a new car, rather than smaller annual payments, said county Tax Commissioner Daniel Powers. The change is also going to mean more work for staff to process the payments, Powers said.

“We’re going to be a lot more busy,” he said.

The tax rate will be 6.5 percent of the vehicle’s market value initially, before stepping up to 6.75 in 2014 and to 7 percent in 2015.

The people who will see the biggest hit are those who make a “casual” purchase that takes place outside dealerships, which make up about 60 percent of title transfers in Georgia, Powers said.

At dealerships, the dealer can accept the title application and payment, which can be rolled into the financing.

The fee will also apply to new residents who have to get a Georgia title for the vehicles they purchased out of state, although a provision allows them to pay in two installments.

Immediate family members, including a spouse, parent, child, sibling, grandparent or grandchild, will be offered a reduced rate of less than 1 percent, if the title fee has already been paid.

Those who purchased a vehicle between Jan. 1, 2012, and March 1, will be allowed to opt in to the title tax if they would rather not pay the annual payments.

Powers said those individuals will have until the end of the year to opt in and recommended against everyone showing up on March 1.

“The lines are going to be long,” he said. “We’re asking the taxpayers to be patient.”

Other county officials also have been keeping a close eye on the pending tax.

Chatham’s finance director, Linda Cramer, said it is not clear what impact the change will have on the county’s revenue. The county gets about $10 million in local tax revenue each year from vehicle sales, which would be lost, Cramer said.

However, she said, a provision of the statute guarantees, for a limited number of years, that counties receive the same amount of property tax revenue they received in the past.

Starting March 1, the title tax can be paid at all Chatham County tag office locations at 1145 Eisenhower Drive, 461 Johnny Mercer Boulevard and 295 Police Memorial Drive.

For more information about the title tax, check online at newtitletax.com.